Huawei announces royalty rates for its patent license programs

On Thursday, June 13, one of the world’s largest patent holders, Huawei, announced royalty rates for its handsets, Wi-Fi, and IoT patent license programs.

“Huawei is willing to share cutting-edge innovations in the form of patents with the world,” said the company’s Chief Legal Officer, Song Liuping, who added, “These will support the common, sustainable development of industries globally.”

His remarks were made at Huawei’s annual flagship event on innovation and intellectual property protection in Shenzhen, which this year was titled “Bridging Horizons of Innovations: Sharing IP, Driving Innovation”. Over the past 20 years, Huawei has been a major contributor to mainstream ICT standards, such as cellular, Wi-Fi and multimedia codecs.

The event featured sharing sessions by experts from diverse areas, covering technologies applicable at home, on the go, and at work. These include leading research on 5.5G, audio and video technologies, ten-size adjustable aperture in mobile phones, a general obstacle detection network that helps cars identify abnormal objects outside the white list of general obstacles, and algorithms that can enable intelligent production scheduling and optimization.

Huawei is committed to licensing its standard essential patents (SEPs) on fair, reasonable, and non-discriminatory (FRAND) principles. The event also saw Huawei announcing royalty rates for 4G and 5G handsets, Wi-Fi 6 devices, and Internet of Things (IoT) products, all areas where Huawei is a top SEP owner.

The rate caps for 4G and 5G handsets are US$1.5 per unit and US$2.5 per unit, respectively. Huawei’s royalty rate for Wi-Fi 6 consumer devices, meanwhile, is US$0.5 per unit. For IoT, the rate for IoT-Centric devices is one percent of the net selling price, capped at US$0.75, while the rate for IoT-Enhanced devices ranges from US$0.3 to US$1 per unit.

Alan Fan, Vice President and Head of the Intellectual Property Rights Department at Huawei, iterated that a positive cycle where innovators are protected, rewarded, and encouraged is key to sustainable innovation.

“Huawei takes a balanced approach to patent licensing. We believe reasonable royalty rates will incentivize both the creation and adoption of innovations.” he said.

To date, Huawei has entered into almost 200 bi-lateral patent licenses, according to Fan. In addition, over 350 companies have obtained licenses to Huawei’s patents through patent pools. Under these licenses, Huawei’s total past royalty payment is about three times its total royalty collection, and its 2022 licensing revenue amounted to US$560 million.

While addressing the event remotely, Tomas Lamanauskas, Deputy Secretary-General of the International Telecommunication Union, said Huawei has been a key player in the collaborative process of supporting cost-effective, inclusive innovation of scale.

“As we continue to tackle global challenges and work towards rescuing the Sustainable Development Goals (SDGs), conducive policies and frameworks are essential to help innovations ecosystems flourish.” Lamanauskas added.

The company’s cumulative R&D investment over the past ten years totaled CNY977.3 billion. In 2022, its R&D expenditure stood at CNY161.5 billion, or 25.1% of its revenue. The 2022 EU Industrial R&D Investment Scoreboard put Huawei No. 4 worldwide.

Huawei has entered into patent licenses with both leading tech industry players such as Samsung and Oppo, and top automakers including Mercedes-Benz, Audi, BMW, Porsche, Subaru, Renault, Lamborghini, and Bentley. It is also an active advocate and supporter of major global open source industry organizations, according to Fan.

Huawei’s official licensing website was also launched at the event. This website offers details about the company’s bilateral licensing programs ranging from mobile handsets to Wi-Fi and cellular IoT. “Intellectual property is the great engine of cooperation in technology. It advances technology for everyone to enjoy.” said Randall R. Rader, former Chief Judge of the United States Court of Appeals for the Federal Circuit.